Enterprise Financial(US:EFSC)2025-07-28 20:09Financial Performance - Net income for Q2 2025 was $51.4 million, or $1.36 per diluted common share, an increase from $1.31 in the previous quarter and $1.19 in the same quarter last year[3]. - Net income for Q2 2025 was $51.384 million, up from $49.961 million in Q1 2025 and $45.446 million in Q2 2024, representing a year-over-year growth of 13.1%[40]. - Diluted earnings per common share increased to $1.36 in Q2 2025, compared to $1.31 in Q1 2025 and $1.19 in Q2 2024, reflecting a year-over-year increase of 14.6%[40]. - Basic earnings per common share for the quarter was $1.36, compared to $1.33 in the previous quarter, indicating a 2.3% increase[43]. - The effective tax rate for Q2 2025 was 20.0%, compared to 18.1% in Q1 2025 and 20.5% in Q2 2024[23]. Revenue and Income Sources - Net interest income for Q2 2025 was $152.8 million, an increase of $5.2 million from the linked quarter and $12.2 million from the prior year quarter[9]. - Noninterest income for Q2 2025 was $20.6 million, up $2.1 million from the previous quarter, primarily due to higher BOLI income[6]. - Total noninterest income for Q2 2025 was $20.604 million, an increase of $2.1 million (11%) from Q1 2025 and $5.1 million (33%) from Q2 2024[19]. - Deposit service charges increased by $520,000 (12%) from Q1 2025 and $398,000 (9%) from Q2 2024, contributing to the rise in noninterest income[19]. - Other income rose by $2.03 million (32%) from Q1 2025 and $4.44 million (111%) from Q2 2024, driven primarily by an increase in BOLI income and community development investment income[20]. Asset and Loan Growth - Total loans reached $11.4 billion, reflecting a quarterly increase of $110.1 million, or 4% on an annualized basis[4][6]. - Total loans reached $11.4 billion at June 30, 2025, up $110.1 million from the linked quarter, with loan production of $875.5 million outpacing repayments of $765.4 million[14]. - Average loans for the quarter ended June 30, 2025, were $11,358,209 thousand, up from $10,962,488 thousand in the same quarter of 2024, an increase of 3.61%[49]. - Total interest-earning assets increased to $14,737,381 thousand for the six months ended June 30, 2025, up from $13,640,515 thousand in the same period of 2024, representing an increase of 8.06%[47]. Deposit and Funding - Total deposits increased to $13.3 billion, up $283.1 million from the previous quarter, with noninterest-bearing deposits accounting for 32% of total deposits[4][6]. - Total deposits increased to $13,317,359,000 from $13,034,230,000 in the previous quarter, marking a growth of 2.2%[45]. - The cost of deposits was 1.82% in Q2 2025, a decrease from 1.83% in the linked quarter[11]. - Noninterest-bearing demand accounts increased to $4,322,332 thousand as of June 30, 2025, compared to $3,928,308 thousand a year ago, representing a rise of 10.04%[49]. Credit Quality and Losses - The allowance for credit losses to total loans was 1.27%, with a provision for credit losses of $3.5 million in Q2 2025[6]. - The provision for credit losses was $3.5 million in Q2 2025, down from $5.2 million in the linked quarter, primarily due to loan growth[16]. - Nonperforming loans were $105.8 million, representing 0.93% of total loans, a slight decrease from 0.97% in the linked quarter[15]. - Net charge-offs for the quarter ended June 30, 2025, were $630,000, compared to recoveries of $(1,059,000) in the previous quarter[51]. Capital and Equity - Total equity increased to $1.92 billion at June 30, 2025, up $54.8 million from the linked quarter[26]. - The tangible common equity to tangible assets ratio adjusted for unrealized losses on held-to-maturity securities was 9.06% at June 30, 2025, compared to 8.94% at March 31, 2025[13]. - The company continues to exceed the "well-capitalized" regulatory benchmark with a total risk-based capital ratio of 14.7%[27]. - Stockholders' equity increased to $1,906,089 thousand as of June 30, 2025, compared to $1,748,240 thousand a year earlier, reflecting a growth of 9.03%[49]. Operational Efficiency - The core efficiency ratio for Q2 2025 was 59.3%, compared to 58.8% for Q1 2025 and 58.1% for Q2 2024[22]. - The efficiency ratio for Q2 2025 was 60.97%, slightly higher than 60.11% in Q1 2025, but improved from 60.26% in Q2 2024[40]. - Employee compensation and benefits rose by $1.96 million (4%) from Q1 2025 and $5.64 million (13%) from Q2 2024, primarily due to merit increases and an increase in variable compensation[21]. Interest Rates and Margins - Net interest margin (NIM) improved to 4.21%, a quarterly increase of 6 basis points, with net interest income rising to $152.8 million, up $5.2 million from the previous quarter[3][6]. - The average interest rate of new loan originations in Q2 2025 was 7.26%, an increase of 14 basis points from the linked quarter[10]. - The average interest rate of deposits declined due to lower short-term rates, partially offset by an increase in deposit balances[9]. - The net interest margin improved slightly to 4.21% for the quarter ended June 30, 2025, compared to 4.19% in the previous year[49].